DELSON, QUEBEC -- (Marketwired) -- 02/27/17 -- Goodfellow Inc. (TSX: GDL) announced today its financial results for the twelve months ended 30 November 2016. The Company reported a net loss of $12.1 million or $1.42 per share for fiscal 2016 compared to a net profit of $8.6 million or $1.01 per share last year. For the three months ended 30 November 2016, the Company reported a net loss of $11.2 million or $1.31 per share compared to a net profit of $2.0 million or $0.23 per share a year ago. Consolidated sales during fiscal 2016 were $565.2 million compared to $539.0 million for the twelve months last year. Consolidated sales for the three months ended 30 November 2016 were $130.7 million compared to $135.2 million last year.
A SPECIAL STATEMENT
The major loss is a result of the very difficult implementation of an ERP system. Unfortunately, the system took some time to provide the hoped for quality of information available to management. Although the situation was perceived to have improved during the year, it was only in December/January 2017 that the disastrous effects were truly revealed.
On January 17th, 2017 a top management change was effected to myself and all energies and measures taken since have gone a long way to correcting the issues. The system transactionally is now working adequately in all locations and the downstream reporting has improved to a basic level. This situation during 2016 was combined with the complete upheaval of our pressure-treated business with the formation of the TLGI Joint-Venture with the Lebel Group. This structural change is now under review and specific changes will be required. Immediate measures taken post January 17th, 2017 are a complete physical review of inventories at all locations and an immediate freeze on any non-essential purchasing with the objective of reducing company-wide inventories 10 to 15%. A major sales initiative is now under way to achieve this objective.
In addition, a significant staff reduction has been initiated at all levels. All non-essential expenses are under immediate review. These initiatives have taken hold and prompt results are being seen. More cost cutting initiatives will be required in the coming months. All measures are being taken to ensure the company returns to its historic profitable operating situation by year-end 2017.
Richard Goodfellow, our President from 1988 until November 2014, has returned to work in Delson as a senior advisor to myself to assist in the re-structuring and the evaluation of the current situation. His presence has gone a long-way to re-establishing our staff's confidence in the future of the company. Clear steps are being taken to re-establish profitability short term.
Historic difficult winter conditions continue in Q1 but most parts of the business have positive expectations for the coming spring. All measures taken should be well reflected by the end of Q2 at the end of May.
Patrick Goodfellow, President and CEO
Goodfellow Inc. is one of eastern Canada's largest independent re-manufacturers and distributors of lumber and hardwood flooring products. Goodfellow shares trade on the Toronto Stock Exchange under the symbol GDL.
GOODFELLOW INC. Consolidated Statements of Comprehensive Income For the years ended November 30, 2016 and 2015 (in thousands of dollars, except per share amounts) ---------------------------------------------------------------------------- Years ended ---------------------------------------------------------------------------- November 30 November 30 2016 2015 ---------------------------------------------------------------------------- $ $ Sales 565,173 538,975 ---------------------------------------------------------------------------- Expenses Cost of goods sold 483,885 435,960 Selling, administrative and general expenses 93,942 88,559 Net financial costs 3,640 2,582 ---------------------------------------------------------------------------- 581,467 527,101 ---------------------------------------------------------------------------- (Loss) Earnings before income taxes (16,294) 11,874 Income taxes (4,189) 3,252 ---------------------------------------------------------------------------- Net (loss) earnings (12,105) 8,622 ---------------------------------------------------------------------------- Items that will not subsequently be reclassified to net earnings Remeasurement of defined benefit plan obligation (asset), recovery of taxes of $1,070 (2015 - net of taxes of $1,099) (2,750) 2,969 ---------------------------------------------------------------------------- Total comprehensive income (14,855) 11,591 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Net (loss) earnings per share - Basic and diluted (1.42) 1.01 ----------------------------------------------------------------------------
GOODFELLOW INC. Consolidated Statements of Financial Position (in thousands of dollars) ---------------------------------------------------------------------------- As at As at ---------------------------------------------------------------------------- November 30 November 30 2016 2015 ---------------------------------------------------------------------------- $ $ Assets Current Assets Cash 703 965 Trade and other receivables 64,255 65,670 Income taxes receivable 6,598 - Inventories 115,391 97,665 Prepaid expenses 4,863 4,156 ---------------------------------------------------------------------------- Total Current Assets 191,810 168,456 Non-Current Assets Property, plant and equipment 38,693 36,146 Intangible assets 5,428 2,667 Defined benefit plan asset 2,234 4,812 Investment in a joint venture 3,403 - ---------------------------------------------------------------------------- Total Non-Current Assets 49,758 43,625 ---------------------------------------------------------------------------- Total Assets 241,568 212,081 ---------------------------------------------------------------------------- Liabilities Current liabilities Bank indebtedness 94,113 46,781 Trade and other payables 30,721 29,762 Income taxes payable - 1,595 Provision 963 1,112 Current portion of long-term debt 136 113 ---------------------------------------------------------------------------- Total Current Liabilities 125,933 79,363 Non-Current Liabilities Provision 475 477 Long-term debt 126 - Deferred income taxes 3,296 4,141 Defined benefit plan obligation 1,045 - ---------------------------------------------------------------------------- Total Non-Current Liabilities 4,942 4,618 ---------------------------------------------------------------------------- Total Liabilities 130,875 83,981 ---------------------------------------------------------------------------- Shareholders' equity Share capital 9,152 9,152 Retained earnings 101,541 118,948 ---------------------------------------------------------------------------- 110,693 128,100 ---------------------------------------------------------------------------- Total Liabilities and Shareholders' Equity 241,568 212,081 ----------------------------------------------------------------------------
GOODFELLOW INC. Consolidated Statements of Cash Flows For the years ended November 30, 2016 and 2015 (in thousands of dollars) ---------------------------------------------------------------------------- Years ended ---------------------------------------------------------------------------- November 30 November 30 2016 2015 ---------------------------------------------------------------------------- $ $ Operating Activities Net (Loss) Earnings (12,105) 8,622 Adjustments for : Depreciation 3,850 3,026 Accretion expense on provision 52 53 (Decrease) Increase in provision (202) 84 Income taxes (4,189) 3,252 Gain on disposal of property, plant and equipment - (26) Interest expense 2,392 1,555 Funding in excess of pension plan expense (197) (474) Share of the profits of a joint venture (403) - ---------------------------------------------------------------------------- (10,802) 16,092 ---------------------------------------------------------------------------- Changes in non-cash working capital items (16,054) (7,859) Interest paid (2,482) (1,659) Income taxes paid (4,663) (2,146) ---------------------------------------------------------------------------- (23,199) (11,664) ---------------------------------------------------------------------------- Net Cash Flows from Operating Activities (34,001) 4,428 ---------------------------------------------------------------------------- Financing Activities Net increase in bank loans 2,000 5,500 Increase in banker's acceptances 45,500 - Increase in long-term debt 369 51 Reimbursement of long-term debt (780) (858) Dividends paid (2,552) (2,977) ---------------------------------------------------------------------------- 44,537 1,716 ---------------------------------------------------------------------------- Investing Activities Acquisition of property, plant and equipment (2,970) (2,101) Increase in intangible assets (2,865) (2,216) Proceeds on disposal of property, plant and equipment - 96 Business acquisitions, net of cash acquired (4,795) - ---------------------------------------------------------------------------- (10,630) (4,221) ---------------------------------------------------------------------------- Net cash (outflow) inflow (94) 1,923 Cash position, beginning of year (1,816) (3,739) ---------------------------------------------------------------------------- Cash position, end of year (1,910) (1,816) ---------------------------------------------------------------------------- Cash position is comprised of : Cash 703 965 Bank overdraft (2,613) (2,781) ---------------------------------------------------------------------------- (1,910) (1,816) ----------------------------------------------------------------------------
GOODFELLOW INC. Consolidated Statements of Change in Shareholders' Equity For the years ended November 30, 2016 and 2015 (in thousands of dollars) ---------------------------------------------------------------------------- Share Retained Capital Earnings Total ---------------------------------------------------------------------------- $ $ $ Balance as at November, 2014 9,152 110,334 119,486 ---------------------------------------------------------------------------- Net earnings - 8,622 8,622 Other comprehensive income - 2,969 2,969 ---------------------------------------------------------------------------- Total Comprehensive income - 11,591 11,591 ---------------------------------------------------------------------------- Transactions with owners of the Company Dividends - (2,977) (2,977) ---------------------------------------------------------------------------- Balance as at November 30, 2015 9,152 118,948 128,100 ---------------------------------------------------------------------------- Net loss - (12,105) (12,105) Other comprehensive loss - (2,750) (2,750) ---------------------------------------------------------------------------- Total Comprehensive loss - (14,855) (14,855) ---------------------------------------------------------------------------- Transactions with owners of the Company Dividends - (2,552) (2,552) ---------------------------------------------------------------------------- Balance as at November 30, 2016 9,152 101,541 110,693 ----------------------------------------------------------------------------
Contacts:
Goodfellow Inc.
Patrick Goodfellow
President and CEO
450 635-6511
450 635-3730 (FAX)
info@goodfellowinc.com